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In 1930, the president of Indianapolis-based Eli Lilly and Co. gave some money to help start Purdue Research Park, with the hope of turning university research into Indiana companies.

Now, at the end of 2013, Purdue will launch an entity that aims to be, well, a lot like Eli Lilly and Co.

As early as this month, the university will create a not-for-profit whose sole task will be to move the university’s 36 drug molecules through various stages of testing in laboratories and into early trials in human patients.

That is what Lilly Research Laboratories, the research and development arm of Eli Lilly and Co., does now for that company’s vast portfolio of drugs. Lilly currently has 56 molecules in human testing.

But with Lilly and its “big pharma” peers cutting back on their lavish R&D spending, they are increasingly looking to universities to pick up the slack. Purdue hopes to be one of the places that soaks up some of the pharma R&D funding and turns out a stream of promising medicines.

Purdue President Mitch Daniels, himself a former Lilly executive, gave his blessing in September to the Purdue Drug Discovery Initiative. Started under Daniels’ predecessor, the initiative includes building a $28 million facility to centralize various centers at Purdue

that already work on drug discovery. It also includes more than $32 million to purchase new drug discovery equipment and to recruit nine drug researchers to Purdue’s West Lafayette campus.

“We have a large number of Purdue designed and engineered drugs in clinical trials, and that’s quite unusual for academia,” said Philip Low, a Purdue chemist whose research has helped power the drug companies Endocyte Inc. and On Target Laboratories LLC. Those companies have rights to 13 of Purdue’s 36 experimental drugs, including eight of the 12 in clinical trials.

“This strength is emerging at a time when the pharmaceutical industry is struggling,” added Low, who has been named director of the Purdue Drug Discovery Initiative. He has already had discussions with Lilly CEO John Lechleiter about ways Lilly and Purdue could work closely together. And he intends to talk to other major pharmaceutical companies, as well.

But to make its initiative work, Purdue will have to succeed where few other universities have before.

University researchers are typically good at producing breakthroughs in scientific understanding of how a disease works—how the interaction of certain compounds in the human body goes wrong, leading to a disease.

Those insights are valuable for pharmaceutical companies because they produce chemical “targets” for a new drug. For example, if one disease is caused by the body making too much of a certain protein, a drug company will try to find a drug that blocks or disrupts that process. If a person’s body makes too little of another protein, a drug company will look for a drug that boosts that process.

Discovery of new targets also helps academic researchers publish articles in scientific journals, the currency among academics that leads to promotions and job offers.

“There’s been academia-industry collaboration for many, many years. I would say in the past, those relationships and collaborations have had very, very mixed results,” said Neil Lesser, a principal in Deloitte Consulting LLP’s life sciences practice. “There are very different mindsets and cultures and expectations in those groups around what the secret sauce is to get something that’s of satisfaction to both parties.”

Poor track record

Discovering targets or even finding an initial compound to “hit” the target is just the first step in a long process of finding a compound that can be made into a pill or an injection and then testing it in patients. Universities typically have not done the latter kind of work, or, when they have tried, they’ve failed.

Ratliff

“The challenge for all of these is taking a project that was designed to develop something that is interesting to faculty, or interesting enough to be funded by government funding, and trying to fit that with corporate needs,” said Jack Pincus, the former vice president of technology transfer at Indiana University who now runs his own consulting firm called BioStrat Consulting. “Faculty design their research projects because they’re interesting, but it may not make a good drug.”

Even Purdue officials acknowledge that universities have a good record in the area.

“We haven’t been very good at taking those molecules and processing them through all the preclinical work that’s needed to get them into the clinic,” said Timothy Ratliff, director of the Purdue Center for Cancer Research.

Preclinical testing refers to laboratory tests or animal tests that help show how a drug will break down when given to a patient and whether it is likely to harm them. Also, an experimental compound must be tested and modified so that it can be manufactured in a form that can survive on a shelf and in a dose that can be both cheap enough to make and yet potent enough to have an effect on patients.

Purdue wants to use its in-house capabilities or to contract with outside firms to perform all those tasks on experimental drugs. Then it also wants to coordinate small trials in human patients called “proof of principle” trials. These tests are used to see if an experimental drug actually binds to its intended target inside a patient.

Purdue is also open to even conducting a larger clinical trial, called a Phase 2 trial, which would typically test which doses are most effective in patients.

All this testing significantly “de-risks” an experimental drug, making pharmaceutical companies more willing to pay handsomely to license it from Purdue. Or, Purdue could spin off promising compounds into new companies.

To help it make this transition, Purdue has formed a five-person advisory committee, made up of three pharmaceutical industry veterans and two professors who have successfully moved experimental drugs through development.

To manage its relationships with drug companies, Purdue has also hired Karson Putt, a graduate of Purdue’s Fort Wayne campus who then worked for New Jersey-based Johnson & Johnson’s drug business.

But Purdue still has plenty of work to do internally. It needs to get the 100-some researchers and graduate students already doing drug research at Purdue to work together as a unit—something that is especially difficult in academia.

The researchers are already doing many of the things drug companies need: making images of human tissues and cells, conducting drug screening of various known drug compounds to see if they would work on a new drug target, conducting mass spectrometry tests on experimental drugs to gauge their impact in a body’s chemistry, and even conducting studies of drugs’ effects on mice and other animals.

“We are learning how to cross the silos and use these resources much more effectively than in the past,” wrote Pete Kissinger, a Purdue analytical chemist who has launched several companies that help drugmakers do preclinical testing, in an e-mail. “This is a big change in culture; takes time.”

Purdue’s drug discovery work will focus on cancer, neurology and infectious diseases, Ratliff said. A recent survey of 56 university drug-discovery efforts identified those same three areas as the top areas of focus.

Hard sell

The attention to these university-pharma collaborations is growing—although that attention is not always positive.

Low

Many academics criticize the coziness of the relationships that appear necessary to make the collaborations work. For example, Dr. Marcia Angell, a Harvard Medical School professor and former editor of the New England Journal of Medicine, has said academic researchers should maintain a mission of expanding knowledge, not adopt drug companies’ mission of expanding profits.

Also, some high-profile partnerships have suddenly ended when the companies changed their research priorities. The most prominent recent example was New York-based Pfizer Inc.’s five-year, $22.5 million deal with Washington University.

Formed in 2010, the partnership was scuttled last year, as Pfizer shifted its research focuses following its 2009 acquisition of New Jersey-based Wyeth. Pfizer also shifted resources into a different kind of partnership with the University of California at San Francisco, where Pfizer scientists work side-by-side with the university’s researchers.

Pfizer will spend $85 million on that partnership over five years.

“Pharma is taking a harder look at who their academic collaborators are and making sure they have motivated investigators,” said Lesser, the Deloitte consultant. Speaking of universities, he added, “They have to have the same commercial mindset that the pharma company does, to make the collaboration really work.”

Indianapolis-based Lilly and London-based AstraZeneca plc also have been forming new kinds of relationships with university researchers.

In 2011, Lilly committed to invest up to $150 million in three venture-capital funds that would fund early-stage drug development work by university researchers. Lilly said the money was meant to develop a “Mirror Portfolio” that would add another 45 to 60 molecules to its pipeline.

Drug companies are trying the new partnerships because their blockbuster drugs have been losing patent protection, allowing billions of dollars in sales to flow to cheaper generic versions. Pfizer lost patent protection on its cholesterol drug Lipitor in 2011, wiping out nearly $11 billion in annual revenue.

The same year, Lilly lost patent protection on its best-seller, Zyprexa, and this year, Lilly will lose patent protection on its current best-seller, Cymbalta. Combined, the drugs had peak sales of more than $10 billion.

Knowing the expirations would come, pharma companies revved up spending on R&D over the past decade. But they have little to show for it. Across the industry, the internal rate of return on R&D spending fell from 13 percent in the 1990s to just 7 percent last year, according to a report by Deloitte and Thomson Reuters.

That opens the door for deeper collaborations between universities and pharmaceutical companies, said Pincus, the tech transfer consultant. But to capitalize, a university like Purdue will have to prove it’s the best place on key diseases that are of interest to drug companies.

“Companies can go anywhere in the world they want to find researchers. They don’t have to pick a particular place,” Pincus said. “They go to the place where they find the expertise they need.”•

Wall's career as a journalist was set in fifth grade, when he took on an afternoon paper route for The Indianapolis News. He admits to being a terrible paperboy because instead of delivering the newspaper right away, he would sit and read it for hours. He may have lost some customers, but he never lost the bug for news. A lifelong resident of central Indiana, Wall grew up in Sheridan—the one spot in Hamilton County untouched by suburbia. After graduating from DePauw University in Greencastle, he joined The Indianapolis Star as a business reporting intern and refused to leave until he had a full-time job. Wall stayed there five years before joining IBJ in February 2007. Wall and his wife now live in Indianapolis with their two sons. When not at the office, the Walls spend time with their extended family and worship at Christ Church Reformed Presbyterian in Brownsburg.

all’s career as a journalist was set in fifth grade, when he took on an afternoon paper route for The Indianapolis News. He admits to being a terrible paperboy because instead of delivering the newspaper right away, he would sit and read it for hours. He may have lost some customers, but he never lost the bug for news. A lifelong resident of central Indiana, Wall grew up in Sheridan—the one spot in Hamilton County untouched by suburbia. After graduating from DePauw University in Greencastle, he joined The Indianapolis Star as a business reporting intern and refused to leave until he had a full-time job. Wall stayed there five years before joining IBJ in February 2007. Wall and his wife now live in Indianapolis with their two sons. When not at the office, the Walls spend time with their extended family and worship at Christ Church Reformed Presbyterian in Brownsburg